Nearly 300 payment leaders from 45 countries agree that a financial system utilizing crypto for payments has strong potential to be faster, more affordable and more transparent than existing money movement systems. So why isn’t it being used more readily?
A new whitepaper from the US Faster Payments Council and Ripple finds 97% of industry leaders across multiple sectors believe in the power of blockchain and crypto to speed up payments within the next three years, yet they need more clarity on regulatory issues and improved sustainability before making big bets on the technology.
Faster, Lower Cost Payments with Crypto
Despite having a relatively low volume of usage relative to overall payments today, crypto payments are growing fast. Mature use cases like remittances have helped drive a 350% increase in crypto payment users over the last three years in the US alone, while infrastructure providers like Stripe, Worldpay and Checkout.com all support stablecoin payment settlement.
These trendlines will likely continue; nearly 90% of surveyed payments leaders say crypto benefits could deliver cost improvements for international transactions and 75% anticipate cost benefits for domestic payments. In addition to cost savings, respondents say crypto and blockchain benefits could also help eliminate the need for pre-funding, speed up settlement times and bring transparency to opaque capital flows.
Regulation and Sustainability are Top of Mind
Even with these early payment beachheads for crypto and near universal excitement over its potential, the technology still faces hurdles to adoption.
While more than half of survey participants say they are considering crypto use, only 17% currently support crypto-enabled payments. For most payments leaders this gap boils down to two clear concerns: regulatory ambiguity and sustainability.
Fortunately, regulatory clarity is coming into focus as regions around the world pursue new frameworks for crypto and launch pilot programs for controlled exploration. This is true even in the US where the report notes the Biden Administration’s recent progress and an evolving dialogue in Congress.
The survey found that nearly all respondents also hold concerns about the environmental impact of crypto. The good news is that most payment leaders are already familiar with the environmental advantages of new technologies like proof-of-stake protocols.
This sensitivity to sustainability dovetails with the overarching public and policymaker sentiment regarding the environmental impacts of money – even traditional fiat currency. Given the overwhelmingly positive attitude towards crypto, the report surmises that more sustainable crypto technologies will prevail and real-world crypto applications will proceed.
Crypto’s Transformative Promise
The goal of this report is to provide industry participants with a deeper understanding of crypto’s use today, the expectations and concerns that could impact future adoption and where it has the potential to produce the greatest change.
Ultimately, it finds that payment leaders understand the power of blockchain and crypto to transform global money movements. Beyond its consensus benefits of cost, speed and transparency, crypto also has the potential to make markets more inclusive.
For additional insights, download the full whitepaper here.